Interesting news for landlords from the past week
By Will Leyland, 28 June 2017
News updates for landlords have been coming thick and fast this year with much government policy being centred on the rental sector. Even the recent General Election was not enough to stem the tide. Here are some of the most interesting stories from the past week.
The latest research released by Kent Reliance – seen as a snapshot of the state of health of the private rental landscape – has shown that the sector is growing at a healthy rate, but with some caveats.
Landlord confidence is said to be falling somewhat due to government measures introduced surrounding tax laws. With changes now in place meaning higher tax implications for landlords, confidence in the government and ruling bodies has dropped in recent times, perhaps unsurprisingly.
However, the value of buy-to-let has now risen by £68bn, up to a remarkable total of £1.3tr. This represents a leap of 5.5%. This is welcome news for landlords who are expanding their portfolios.
The number of landlords now expanding their portfolios has dropped, with the report stating that 19% of landlords are now expected to reduce their portfolios, compared to 13% increasing as amateur landlords leave the market in response to the new tax rules affecting higher rate taxpayers.
More than six months after first suggesting the idea, the government has announced plans to ban fees to lettings agents in England, according to the BBC.
A new Tenants’ Fees Bill was announced in the Queen’s Speech, which will stop tenants having to pay money to agents.
The commitment was announced by the Conservatives in the 2016 Autumn Statement. ARLA have said that it expects the measures to increase rents on property as the costs are passed on to landlords, who are already squeezed following legislation introduced for tax break reductions.
Landlords with long-term tenants should be unaffected, and professional landlords could even see portfolio expansion opportunities increased as amateur and small time landlords exit the market.
The Council of Mortgage Lenders (CML) has called on the government to ensure that no new tax changes are forced onto landlords as 2017 has faced a somewhat slow start thanks to a somewhat hostile atmosphere.
Buy-to-let investors have faced a stamp duty surcharge, tax relief changes and stricter affordability checks.
“Buy-to-let had a weak start to 2017, and the sector’s contribution to overall net mortgage lending has fallen considerably over the last year,” said CML director general Paul Smee, speaking to the BBC.
“While falling mortgage interest rates have helped support borrowing, tax and prudential measures are exerting pressure on the buy-to-let market. Following the distortion of the stamp duty change on second properties last year, we expected a slight recovery in lending levels. However, this has not materialised, and we therefore have lowered our forecast for buy-to-let lending this year and next.
“This re-emphasises the case for avoiding further changes to the tax and regulatory framework until the effect of these already in train have been properly assessed.”
The CML’s comments have been welcomed by landlords and agents, who are now keen to crack on with the second half of the year and to make the most of increasing property values. It’s thought that with smaller landlords now looking to exit the market there is now a much greater opportunity for landlords looking to expand their portfolio.
Looking for more information on portfolio management? Get in touch with our team today for more information!
As the traditional deposits model looks increasingly outdated, alternatives are beginning to be suggested
It is not only young people who are renting in greater numbers
What features are most important when looking for a buy-to-let property?
Many tenants may be putting their lives at risk due to a lack of knowledge
Research shows that more and more people are renting in the long term